Income Tax Appellate Tribunal - Pune
Siddhivinayak Shree, Pune vs Assessee on 7 June, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
Before Shri Shailendra Kumar Yadav Judicial Member
and Shri R.K. Panda Accountant Member
ITA No.883/PN/2010
(Assessment Year 2006-07)
Siddivinayak Shree,
9, Siddhivinayak, M.G. Camp,
Near Golibar Maidan,
Pune 411001.
PAN No. AASFS 1883K .. Appellant
Vs.
ACIT, Range-2, Pune .. Respondent
ITA No. 179/PN/2011 and 913/PN/2010
(Assessment Years 2005-06 and 2007-08)
Siddivinayak Shree,
9, Siddhivinayak, M.G. Camp,
Near Golibar Maidan,
Pune 411001.
PAN No. AASFS 1883K .. Appellant
Vs.
ITO, Ward-2(2), Pune .. Respondent
Assessee by : Shri Vipin Gujrathi
Revenue by : Shri S.K. Singh
Date of Hearing : 07-06-2013
Date of Pronouncement : 30-07-2013
ORDER
PER R.K. PANDA, AM :
The above 3 appeals filed by the assessee are directed against the separate orders of the CIT(A)-II, Pune relating to A.Ys. 2005-06 to 2007-08 respectively. Since identical grounds have been taken by the assessee in all these appeals, therefore, for the sake of convenience all these appeals were heard together and are being disposed of by this common order. 2 ITA No.883/PN/2010 (A.Y. 2006-07) :
2. Facts of the case, in brief, are that the assessee, an AOP, is engaged in the business of construction as promoter and builder. The assessee has developed a project "Sun Shree" at Survey No.20/2, NIBM Road, Pune. The net area of the land for the project was stated to be 26009.49 sq.ft. and the built up area of the residential units is 3,21,124 sq.ft. The area of the amenity shopping was stated to be 9472.48 sq.ft. The profits from the project have been offered on the project completion basis. The completion certificate for the project has been obtained in piece-mill for the part of the project. However, the completion certificate for the entire project has not been obtained by the assessee from Pune Municipal Corporation. During the year under consideration the assessee had shown profit of Rs.64,61,135/- which has been claimed as exempt u/s.80IB(10) of the Income Tax Act. 2.1 The Assessing Officer analysed the provisions of section 80IB(10) and noted that the assessee has not fulfilled two conditions, i.e. (1) the area of the shopping is exceeding 2000 sq.ft. and (2) the assessee did not produce the completion certificate from Pune Municipal Corporation. The Assessing Officer, therefore, asked the assessee to explain as to why the claim of exemption u/s.80IB(10) should not be disallowed. The assessee made elaborate written submission which has been reproduced by the Assessing Officer from pages 3 to 17 of the assessment order. It was submitted that the assessee is an AOP constituted by the following members :
(a) M/s. Siddhivinayak Shree - a partnership firm
(b) M/s. Giriraj Developers - a partnership firm
3
It is engaged in the business of constructing 2 housing projects viz., Sun Shree on the plot situated at following places :
a. Plot No 3 situated at S. No. 20/2, N.I.B.M. Road, Kondhwa Khurd, Pune 411048 (hereinafter referred to as "Project A").
b. Plot No 4 situated at S. No. 20/2, N.I.B.M. Road, Kondhwa Khurd, Pune 411048 (hereinafter referred to as "Project B").
2.2 One of the members of the AOP - M/s Giriraj Developers had acquired development rights of land situated at S. No. 20/2 Kondhwa Pune admeasuring about 39,998.26 Square Meters from a war widow Smt. Sureka Patankar. M/s Giriraj Developers subdivided the said land into 5 separate plots no 1, 2, 3, 4, and 5 and got the layout approved from PMC vide Order No DPO/6431/IV/82 dated 10-03-1997. Members (M/s Siddhivinayak Shree & M/s Giriraj Developers) entered into Joint Venture Agreement dated 2nd January 1999 whereby the AOP is constituted. M/s Giriraj Developers, a member of AOP, has contributed the Plot no. 3, Survey No. 20/2, Kondhwa admeasuring about 11,246 Square Meters as its capital contribution.
2.3 Pune Municipal Corporation (in short hereafter referred to as "PMC") approved the project on Plot No 3 on 11th January 1999 vide commencement certificate no. 2117 Project on plot no. 3 hereinafter referred to as "Project A" consisted of six buildings namely D-1, D-2, E-
2, E-3, E-4 & F. The project consisted of 168 flats and 40 shops. However, one shop from D building (Wing D1 & D2) was deleted as it was obstructing the movement of vehicles of flat purchasers. The assessee has revised the building plan and for deletion of shop the appropriate 4 approval of PMC has been obtained. The details of the project are as below Name of the Residential Shops Shops as per Buildings Flats completion certificate D-1 24 6 7 D-2 24 10 8 E-2 24 9 9 E-3 24 7 7 E-4 24 8 8 F 48 0 0 TOTAL 168 40 39 2.4 Members of the assessee AOP entered into a Supplementary Joint Venture Agreement on 27th July 2000 in respect of plot no. 4 admeasuring about 12,162 Square Meters which was owned by the member M/s Giriraj Developer. PMC, the local authority, approved the first building plan in respect of plot no. 4 vide commencement certificate no. 4410 dated 6th March 2000. Project on plot no. 4 hereinafter referred to as "Project B" consisted of 3 buildings namely Gold (G), Crown (H), & Kangan (I+K). The project consisted of 249 flats each admeasuring less than 1500 sq. ft built up as detailed below Name of Residential Shops the Buildings Flats G = GOLD 101 0 H =CROWN 68 0 I+K = KANGAN 80 0 TOTAL 249 0 Project B does not include any shop or other commercial establishment. 5 2.5 The assessee claimed the deduction under section 80IB(10) of the I. T. Act for the assessment years 2001-02, 2004-05, 2005-06, 2006-07 & 2007-08 in respect of both the housing projects treating them as one project under mistaken belief of the fact that it is constructing one project. 2.6 Assessments of income for the assessment year 2001-02, 2004- 05, 2005-06 are completed under section 143(3) of the I. T. Act allowing the deduction as claimed by the assessee.
2.7 It was submitted that :
a. there are actually two projects i.e. Project A on Plot 3 and Project B on Plot No 4 in existence, b. The project A includes shops/commercial area whereas the Project B does not include any shop/commercial area c. Both the projects have been separately sanctioned by the PMC.
d. It was submitted that the assessee submitted application for occupancy certificate to PMC on 4th April 2006 for building D-1, Building D-2, Building E-2, Building E-3 and Building E-4 which are part of project A on plot no. 3 and Building I + K which are part of project B on plot no. 4. It was submitted that the following No Objection Certificates from various departments were also submitted along with the application for occupancy certificate i. Drainage Department ii. Water Department iii Fire Department iv. NOC for Lift v. NOC Health Department vi. NOC Road Department & vii. Structural Stability Certificate 6 e. The assessee submitted that PMC issued a letter dated 26th April 2006 (which was received by the architect of the assessee in the first week of May 2006) intimating that the occupancy certificate is withheld for the reason that the appellant has not paid the compounding fees Rs. 2,41,865/- for unauthorized construction of floor no, 5 & 6 of building no. B-1 & B-2 by using FSI of DP road.
f. It was submitted that PMC had communicated to the assessee the only reason of unauthorized construction for withholding the occupancy certificate. However, the Additional Commissioner of the Urban Land (Ceiling & Regulation) Act 1976 had intimated to the City Engineer of PMC vide letter dated 20th December 2003 not to issue the occupancy/completion certificate to the assessee for so called violation of provision of Urban Land (Ceiling & Regulation) Act 1976. However, PMC till today has not communicated the assessee for the objection raised by ULC.
g. It was submitted before the assessing officer that it has not done any unauthorized construction as alleged in the said letter and there was no building B-1 and B-2 included in the layout of the assessee. The assessee further submitted that the unauthorized construction was done by the other third parties on the adjoining plot and the objection was raised as the plot of land of the assessee and adjoining plot was amalgamated under compulsion. The assessee further brought to the notice of the AO that building B-1 & B-2 are constructed on adjoining plot.
h. In respect of the objection raised by Urban Land Ceiling Department the assessee brought to the notice of the AO that it has allotted the built up area of 944 sq. meters as against 942 sq. meter agreed to be allotted for Economic Weaker Section of the society as per section 20 of the ULC Act.7
i. It was submitted that the assessee has given possession of all flats under consideration before December 2007 in respect of which the completion has not received. Details giving the date of agreement, date of possession, undertaking for maintenance charges payable and MSEB connections (Electricity Meter allotment) were filed before the AO.
j. In respect of the non completion of the projects the assessee brought to the notice of the learned assessing officer that the projects under consideration were completed on 4th April 2006 i.e. much before 31st March 2008. However, the local authority, i.e. PMC did not grant the completion certificate as the authorities under the Urban Land (Ceiling & Regulation) Act 1976 had objected to PMC for granting completion to the assessee. The entire correspondences between ULC department, Ministry of Urban development, PMC and the assessee were furnished. It was submitted that the project was complete in every respect and the objection of ULC was beyond its control.
3. However, the Assessing Officer was not satisfied with the explanation given by the assessee and rejected the claim of deduction u/s.80IB(10) on account of the following grounds :
a. That the assessee is claiming deduction under section 80IB(10) since assessment year 2001-02 and the assessee is showing the entire project as a single project.
b. The assessee had prepared and presented common accounts before the I.T. Department. He further held that if the assessee's plea is accepted then it would mean that the claim in the earlier year has been wrongly made and allowed on the basis of incorrect certificate of Chartered Accountant.
c. The AO held that merely separate sanction of the project by PMC does not make the building project as two separate undertakings in view of common management, common accounts, common marketing etc. d. That even though the project is complete but the completion of the project means the completion certificate granted by the local authority.
e. That the project included shops/other commercial establishment in excess of 2000 Sq. ft built up.8
4. Before the CIT(A) the assessee made elaborate submissions and also produced the following additional evidences :
a. Certificate from PMC to the effect that the projects on Plot No.3 & Plot No.4 are separate and independent.
b. Certificate from Architect that both the projects are separate and independent projects.
c. Revised Audit Report in the Form 10CCB by Chartered Accountant certifying the deduction in respect of each project separately. d. A Copy of audited Balance Sheet and Profit & Loss Account ending on 31st March 2009 showing that no further expenditure is incurred on any of the project and e. Completion Certificate dated 30th March 2010 for Project A in respect of 120 flats and 39 shops. Therefore, the project A on plot no. 3 was complete. The AO gave no objection and his consent for admission of additional evidence and the same has been admitted by CIT(A).
4.1 The Ld. CIT(A) called for a remand report from the Assessing Officer who had no objection for admission of the additional evidences. After confronting the remand report to the assessee the Ld.CIT(A) accepted the contention of the assessee that it is engaged in construction and development of 2 separate and independent projects by observing as under :
"3.7 I have also perused the additional evidence filed by the appellant being the certificate of PMC dated 13.11.2009, certifying that both the proposals were separate, and separately approved and sanctioned vide different commencement certificates. Considering the different commencement certificates for the two projects dated 11.01.99 and 06.03.2000, they are seen to be separated by time and space since there was also a road passing in between these two, along with the revised form no. 10CCB furnished as additional evidence, it is held that the projects 'A' and 'B' were two different projects in the case of the appellant. Ground no. 1 is, therefore, held to be allowed."
4.2 The revenue is not in appeal before us against the above observation of the Ld.CIT(A).
94.3 However, so far as the claim of deduction u/s.80IB(10) is concerned he rejected the claim of the assessee on account of the following :
"a. The Completion Certificate dated 30th March 2010 issued by PMC even though with reference to the date of application 4th April 2006 in respect of Project A was beyond the stipulated date i.e. 31st March 2008. Since, PMC has issued the certificate on 30th March 2010 there was violation of provision of section 80IB(10) (a).
b. As far as the project B was concerned the assessee did not explain anything and therefore, the project B was also not eligible for claiming deduction.
c. The built up area of the shops/commercial area was 9742 Sq. ft included in project A and the aggregate built up area of project A was 116433 Sq. ft. Therefore, the built up area of shops/commercial establishments was 8.37% of the aggregate built up area. The decision of the Special Bench of ITAT Pune in the case of Brahma Associates Vs JCIT 122 TTJ 423 (Poona) relates to 2005-06 and is not applicable to subsequent assessment years. He held that the provisions prevailing on 1st Day of April of the assessment year which restricted commercial area to 5% shall prevail and since the built up area of the shops is 8.37% the appellant is not eligible for deduction in respect of project A".
5. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds :
"1) On the facts and in the circumstances of the case and in law, the Hon'ble CIT (Appeal) -II Pune erred in confirming the disallowance of deduction under section 80IB(10) of Rs.64,61,135/- made by the learned assessing officer without appreciating the facts of the case in the proper perspective. The appellant prays that the claim of deduction claimed under section 80IB (10) may please be granted.
2) Without prejudice to the first ground of appeal the appellant wishes to prefer the second ground of appeal.
On the facts and in the circumstances of the case and in law, the Hon'ble CIT (Appeal) -II Pune ought to have allowed the proportionate deduction in respect of residential units/flats for which completion certificate was granted by Pune Municipal Corporation (PMC) before 31st March 2008. The appellant prays that the proportionate deduction under section 80IB (10) in respect of residential units/flats for which completion certificate is granted by PMC may please be allowed.
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3) The appellant hereby reserves the right to add, amend, or raise any additional ground or grounds of appeal or delete or withdraw any of the ground of appeal/s"
5.1 The Ld. Counsel for the assessee strongly challenged the order of the CIT(A).
6. So far as the issue raised by the Ld.CIT(A) that even though the project is completed before May 2006 but the assessee has not obtained the completion certificate before 31-03-2008 is concerned the Ld. Counsel for the assessee submitted that the condition of obtaining completion certificate of project is not mandatory and what is important is substantial compliance which needs to be established. Referring to the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Tarnetar Corproation in Tax Appeal No.1241/PN/2001 reported in 26 Taxmann.com 180 he submitted that the Hon'ble High Court in the said decision has held that every condition (condition as to the completion before prescribed date) of the statute cannot be seen as mandatory if the substantial compliance thereof is established on record. In a given case, the court may take a view that minor deviations thereof would not vitiate the very purpose for which the deduction has been made available. Referring to the said decision he submitted that in the said case the completion was required to be obtained before 31-03-2008. The assessee had completed the project in the year 2006, i.e. well before the last date namely 31-03-2008 and had also sold several units which was completed and actually occupied and the assessee had applied for the BU permission to the local authority.11
6.1 The local authority at one stage rejected such application in the year 2006 and thereafter upon revised efforts from the assessee granted the same by order dated 19th March 2009. In the case of the assessee the application for completion was submitted on 4th April 2006 and the permission was not rejected but was withheld for technical reason i.e. non allotment of built up area in terms of section 20 of the Urban Land & Ceiling (Regulation) Act 1976. The assessee had sold and given possession to no. of occupant as is evidenced from page no. 23 to 27 of the paper book. In the case of the assessee it is established beyond doubt that the assessee has completed construction well before 31st March 2008. It is also neither the case of AO nor Ld.CIT(A) that the construction of the project is not complete. Only objection is that the assessee has failed to obtain completion certificate which was withheld for technical reason. Since the housing project is complete and the condition as to the obtaining the completion is not mandatory the assessee is entitled to deduction under section 80IB(10)of the l.T. Act.
6.2 Referring to Page 12 of the Paper Book he submitted that the assessee submitted application for Occupancy Certificate to PMC (the Local Authority) on 4th April 2006 along with completion Certificate issued by Architect and necessary no objections or various clearances such as drainage, Water, Fire NOC, Lift NOC, Health NOC, Road NOC and Structural Stability Certificate. PMC issued a letter dated 26th April 2006 raising certain objection regarding unauthorized construction by utilizing FSI of Road in building B-1 and Building B-2 which is not the part of the project of the appellant. The said objection letter was served on the assessee in the first week of May 2006. He submitted that since the PMC issued 12 objection beyond the period of 21 days the Occupancy certificate is deemed to have been granted in terms of Rule 7.7 of Development Control Rule of Pune especially in the light of the fact that the assessee constructed building as per sanctioned plan.
6.3 He submitted that since the assessee submitted application on 4th April 2006 and PMC Communicated the objection to the assessee vide letter dated 26th April 2006 which was served on the Architect of the assessee on or about 4th or 5th May i.e. beyond a period of 21 days, therefore, according to Rule 7.7 of D. C. Rules, Pune the completion certificate is deemed to have been granted by PMC from the date of application especially in the light of the fact that the assessee had constructed building strictly in accordance with building plan approved by PMC and the local authority has not raised any objection as to violation of building plans. For this proposition he relied on the decision of the coordinate Bench of the Tribunal in the case of M/s. Satish Bora and Associates Vs ACIT ITA No 713 & 714/PN/2010. 6.4 Referring to Page 11 of the Paper Book he submitted that the assessee submitted Occupancy Certificate in respect of project on Plot No 3 (Project A) before the Hon'ble CIT(A) as an additional evidence during the course of appeal proceedings. PMC issued certificate on 31st March 2010 with reference to application dated 4th April 2006 in respect of building D-1, building D-2, Building E-2, building E-3 and building E-4. 6.5 The Ld. CIT(A) rejected the claim of the assessee in respect of project A on the ground that even though the assessee has produced completion certificate in respect of project on plot no 3 (Project A) as an additional evidence the PMC has issued the certificate beyond the stipulated period i.e. 13 31st March 2008, therefore, the Project A is not eligible deduction. He submitted that date of issue of completion certificate is not crucial but the date of completion of project is relevant. Delay in obtaining the certificate should not affect adversely the assessee because the assessee can only apply with in prescribed time limit and powers of issuance of completion certificate lies with the authorities. If the delay is on the part of the Municipal Authorities the assessee should not be penalized especially when in the case of the assessee the authorities have clarified the date of completion i.e. 4th April 2006.
6.6 Referring to the decisions of the Pune Bench of the Tribunal in the case of Hindusthan Samuha Awas Vs ITO TIA No 945-950/PN/2010 (Pune), Chennai Bench of the Tribunal in the case of Sanghvi Doshi Enterprises Vs ITO 141 TTJ (Chennai) TM 1, Indore Bench of the Tribunal in the case of Global Realty Vs. ITO 134 ITD 407 (Ind) and the decision in the case of ITO Vs Khyati Financial Services 6 Taxmann. Com he submitted that it has been held in the above decisions that the date of completion certified is material rather than the date on which the certificate is issued by the local authority.
7. So far as the compliance of conditions of section 20 of Urban Ceiling and Regulation Act, 1976 he submitted that the assessee was denied completion certificate as ULC Authorities had objected to issue of completion certificate mainly on the ground of non-allotment of built up area as per sanctioned scheme. Referring to the chart enclosed to the synopsis he submitted that the assessee has allotted built up area of 944.10 Square Meters against 942 square meters as per condition of sanction before 27th February 2008, i.e. before 31st March 2008. The assessee has complied with the 14 condition of allotment on 27th February 2008. However, the ULC Act was repealed in the year 2009 and therefore, neither PMC nor ULC Department nor Secretariat to Mantralaya is responding to the assessee for issuing completion certificate.
7.1 He submitted that the assessee had done everything which was possible for it or was within its power. The assessee cannot be panelized for something which is beyond its ability. For this proposition he relied on the decision of ITAT Pune Bench in the case of Ramsukh Properties Vs DCIT Cir 2 Pune vide ITA No 84/PN/2011.
8. As regards commercial area included in project on Plot No.3 (Project A) he submitted that in project on the plot no 3 (Project A) the assessee had constructed shops admeasuring about 9472 Square Feet out of the aggregate built up area 1,16,433 square feet. The commercial built up area is 8.37% of the aggregate built up area. Referring to the decision of the Special Bench of the Tribunal in the case of Brahma Associates 122 TTJ 433 (Pune) which has since been confirmed by Hon'ble Bombay High Court reported in 333 ITR 289 (Bom.) he submitted that the housing project approved before 31st March 2005 can include commercial area.
8.1 He submitted that the CIT(A) disallowed the claim of deduction on the ground that the Special Bench has examined the issue for assessment year 2003-04 and the position would be different w.e.f. AY 2005-06. Therefore, the ratio of Brahma Associates will not be applicable for AY 2005-06 and subsequent years.
158.2 He submitted that the law as existed in the year when the assessee submitted its proposal and the permission is granted by local authority and the assessee commenced the development is to be applied in determining its eligibility of the deduction claimed under section 80IB(10). For this proposition he relied on the decision of the Hon'ble Gujarat High Court in the case of Manan Corporation Vs ACIT Tax Case No 1053 of 2011 wherein it has been held that S. 80-IB(10)(d) was inserted by the Finance (No.2) Act, 2004 to impose a ceiling on the extent of commercial area that could be contained in the housing project is prospective and cannot be applied to the project approved before 01/04/2005.
8.3 Referring to the above mentioned decision the Ld. Counsel for the assessee drew the attention of the Bench to the following observation of the Hon'ble High Court :
"The judgment of the Bombay High Court in Brahma Associates 333 ITR 289 (Bom) that w. e. f. 1.4.2005, deduction u/s 80-IB(10) would be governed by the restriction on commercial area imposed by clause (d) does not mean that even projects approved prior to 1.4.2005 would be governed by the said restriction.
Neither the assessee nor the local authority responsible to approve the construction projects are expected to contemplate future amendment in the statute and approve and/or carry out constructions maintaining the ratio of residential housing and commercial construction as provided by the amended Act. The entire object of s. 80-16(10) is to facilitate the construction of residential housing project and if at the stage of approving the project, there was no such restriction in the Act, the restriction subsequently imposed has to be necessarily construed on a prospective basis and as applying to projects approved after that date." 8.4 He also relied on the following judgments
a) Hiranandani Akruti JV Vs. DCIT 39 SOT 498
b) Opel Shelters Private Limited Vs. ACIT ITA No 219/PN/2009 (Pune)
c) D. S. Kulkarni & Associates ITA No 17/PN/2009 (Pune) 16
9. The Ld. Departmental Representative on the other hand heavily relied on the decision of Hon'ble CIT(A). He submitted that since the assessee failed to obtain the completion certificate, which is mandatory, before the specified date which in the instant case is 31-03-2008 and since the commercial/shopping area of the project is in excess of 5% or 2000 sq.ft. whichever is less, therefore, the assessee has violated the provisions of section 80IB(10) and, therefore, is not entitled to deduction u/s.80IB(10). The Ld. Departmental Representative also relied on the following decisions :
1. M/s. Sainath Estates (P) Ltd. Vs. DCIT ITA Nos. 299-
300/Hyd/2012 order dated 08-02-2012 for A.Y. 2005-06/2006-07.
2. ITO Vs. M/s. Everest Home Construction (India) Pvt. Ltd. ITA No.7021/M/2008 order dated 12-09-2012 for A.Y. 2006-07.
10. The Ld. Counsel for the assessee in his rejoinder submitted that the Hon'ble Gujarat High Court in the case of Tarnetar Corporation has held that every statute cannot be seen as mandatory and if substantial compliance thereof is established on record, in a given case, the court may take a view that minor deviation thereof would vitiate the very purpose for which the deduction was made available. Referring to the decision in the case of Sainath Estates (P) Ltd. relied on by Ld. Departmental Representative he submitted that it was not clear if the project of the assessee was completed or not. However, in the instant case the project was complete and the assessee has applied for completion certificate on 04-04-2006 which is much before 31-03-2008. Further, the assessee has demonstrated that it had handed over the possession of the residential units to the occupants, the occupants had undertaken to pay maintenance charges and paid electricity bills. Further, in the said case the assessee could not explain the reason for non-issuance of 17 completion certificate by local authority. However, in the instant case the reasons for non-issuance of completion certificate was brought to the notice of the lower authority. Therefore, the decision in the case of Sainath Estates (P) Ltd. is distinguishable on facts and is not applicable to the facts of the present case.
11. As regard the decision in the case of M/s. Everest Home Constructions (India) Pvt. Ltd. relied on by Ld. Departmental Representative to the proposition that the amendment brought in by the Finance Act 2004 is applicable to the assessment year 2005-06 and subsequent years even if the project is approved and commenced before 31st March 2005 and amendment restricting the commercial area to the extent of 5% or 2000 Sq. ft whichever is less is applicable to the year under consideration and therefore, the project of the assessee is not eligible for deduction as the commercial area is about 9472 Sq. ft. being 8.37% of the aggregate built up area he submitted that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Gujarat High Court in the case of Manan Corporation Vs ACIT vide Tax appeal no. 1053 of 2011. He submitted that the Hon'ble Gujarat High Court pronounced the judgment on 3rd September 2012 whereas the Hon'ble Mumbai Bench pronounced the judgment in the case of Everest Homes on 12th September 2012. However, the judgment of the Gujarat High Court was not brought to the notice of the Hon'ble ITAT Bench of Mumbai. 11.1 He submitted that the Gujarat High Court judgment is the only judgment of the High Court on the issue of commercial area included in the project and it is binding on all benches of ITAT till the time any contrary judgment of other High Court is delivered. For this proposition he relied on 18 the decision of Hon'ble Bombay High Court in the case of CIT Vs Godavaridevi Saraf 113 ITR 589 (Bom).
12. On a pointed query raised by the Bench to explain as to why the plots of the assessee i.e. plot no. 3 and plot no.4 of survey no.20/2 were amalgamated with plot no. 26 to 32 and plot no. 48 to 55 of survey no. 19/1 + 20/1, Khondwa, Pune which were not belonging to the assessee, the Ld. Counsel for the assessee drew the attention of the Bench to the correspondence between PMC and the owner of the adjoining plot i.e. plot no. 26 to 32 and plot no, 48 to 55 of survey no, 19/1 +20/1, Khondwa, Pune. The correspondence was for the period from the year 1995 to 1999 concerning the unauthorized construction done by the said adjoining plot owner. It was further explained during assessment proceedings that the adjoining plot owner did not leave the side margin and front and back margin and therefore, the PMC proposed to demolish the construction on the adjoining plot. Therefore, there was issue regarding the boundaries of the plot of the assessee and the adjoining owner and it would have created further disputes delaying the project of the appellant. In order to resolve the matter amicably the assessee and the adjoining plot owner had amalgamated both the plots.
12.1 The assessee further demonstrated that even after the amalgamation the FSI in respect of plot no. 3 and plot no.4 was sanctioned with reference to the area of the respective plots.
AREA OF PLOT NO 3 AFTER SUB DIVISION IN SQ, WITS
AREA BY AREA FOR AREA AREA BALANCE
TRINGULAR CONSIDERATION UNDER DP UNDER AREA
METHOD ROAD INTERNAL
ROAD
11245.76 11245.76 2881.76 517.80 7846.20
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AREA AVAILABLE FOR CONSTRUCTION
NET AREA OF AREA UNDER TOTAL
THE PLOT DP ROAD
7846.20 2881.76 10727.96
AREA CONSUMED BY BUILDINGS ON PLOT NO 3
BUILDING BUILT UP
AREA
D 2373.18
E-1 2402.26
E-2 2402.26
F 2804.21
TOTAL 9981.91
AREA OF PLOT NO 4 AFTER SUB DIVISION IN SQ. MTS
AREA BY AREA FOR AREA AREA BALANCE
TRINGULAR CONSIDERATIO UNDER DP UNDER AREA
METHOD N ROAD INTERNAL
ROAD
12162.035 12162.035 4242.035 517.80 7402.20
AREA AVAILABLE FOR CONSTRUCTION
NET AREA OF AREA UNDER TOTAL
THE PLOT DP ROAD
7402.20 4242.035 11644.24
12.2 He submitted that the plots even after amalgamation are maintaining their respective individual identity. The assessee further submitted that even after amalgamation of the plots the assessee's deduction cannot be disallowed on the legal ground also. The assessee submitted that there is a difference between the layout plan and building plan. The approval of housing project and approval of building plans are two different concepts. He submitted that a layout can have no of housing projects out of which there could be some projects eligible for deduction and other projects may not be eligible for deduction. For this proposition he relied on the decision of the ITAT, Bangalore Bench in the case of DCIT Vs. Brigade Enterprise (P) Ltd. reported in 119 TTJ 269 and the decision of Hon'ble Bombay High Court in the case of CIT Vs. Vandana Properties reported in 76 DTR 364 20 and the decision of ITAT Pune in case of Rahul Construction Co. Vs. ITO vide ITA No.1250/PN/2009. He accordingly submitted that the assessee is eligible for deduction u/s.80IB(10) of the Income Tax Act, 1961.
13. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case denied the claim of deduction u/s.80IB(10) on the ground that (a) the assessee has not obtained the completion certificate on or before 31-03-2008 (b) that the project includes shops and other commercial areas in excess of the prescribed limit and (c) that the assessee has claimed deduction u/s.80IB(10) since A.Y. 2001-02 and the assessee is showing the entire project as a single project. We find the Ld.CIT(A), on the basis of the additional evidences filed before him and the remand report obtained from the AO, held that the projects (A) and (B) undertaken by the assessee are two different projects. The relevant observations of the Ld.CIT(A) are already reproduced at para 4.1 of the impugned order. The revenue is not in appeal before us on this issue. Therefore, this issue on which the AO has denied the deduction is not relevant.
14. However, the Ld.CIT(A) upheld the action of the AO in denying the claim of deduction on the other reasons stated by the AO, i.e. (a) the completion certificate has not been obtained on or before 31-03-2008 (b) that the assessee did not explain anything about Project B and (c) that the project includes shops and commercial area in excess of the prescribed limit.
2114.1 From the details furnished by the assessee in the Paper Book we find the details of completion certificate No and date and the reference to the date of application are as under :
Project A -Plot No 3 Completion Date Completion With Building No of flats SHOPS Certificate No reference to date BCO/03/262 28/06/2000 27/03/2000 F 48 0 640 30/03/2010 04/04/2006 D-1 24 7 640 30/03/2010 04/04/2006 D-2 24 8 640 30/03/2010 04/04/2006 E-2 24 9 640 30/03/2010 04/04/2006 E-3 24 7 640 30/03/2010 04/04/2006 E-4 24 8 TOTAL 168 39 Project B -Plot No 4 Completion Date Completion With Building No of SHOPS Certificate No reference to date flats BCO/03/146 05/10/2005 05/10/2005 G 101 0 (Gold) BCO/03/146 05/10/2005 05/10/2005 H 68 0 (Crown) TOTAL 169 0 The completion certificate in respect of building I+K in respect of 80 flats is not granted so far by PMC although the assessee has duly applied for the same on 04-04-2006 as per application for occupancy certificate received by PMC on 04-04-2006, a copy of which is placed at Paper Book Page No.12.
14.2 It is the submission of the Ld. Counsel for the assessee that the project A and building I & K of Project B are complete before May 2006 since the assessee has applied for completion on 04-04-2006. Similarly the assessee 22 has applied on 05-10-2005 for Project B (G & H building) which was received by the assessee. The permission was not rejected but was withheld for technical reasons, i.e. non allotment of built up area in terms of section 20 of the Urban Land and Ceiling (Regulation) Act, 1976 and non-payment of compounding fees of Rs.2,41,805/-. The assessee had enclosed the completion certificate, no objection certificates/clearance such as drainage, water, fire NOC, Lift NOC, Health NOC, Road NOC and structural stability certificate etc for the entire project A and building I & K of Project B (Page No.12 of Paper Book). Completion certificate for Building G and H of Project B are already availed and there is no dispute. Further, the PMC issued completion certificate on 31-03-2010 with reference to application dated 04-04-2006 in respect of building D1, building D2, building E2, building E3 and building E4. Therefore, the completion certificate in respect of Building D1, D2, E2, E3 & E4 of building A relates back to the application dated 04-04-2006.
14.3 We find merit in the above submission of the Ld. Counsel for the assessee. It has not been disputed by the Revenue that the assessee has not applied to the Municipal Corporation for issue of completion certificate on 04-04-2006 for Project A and building I & K of Project B. It is also not in dispute that the completion certificate issued by the PMC dated 31-03-2010 for Buildings of Project A is not with reference to application dated 04-04- 2006. Therefore, in our opinion, the completion certificate issued on 31-03- 2010 with reference to the application dated 04-04-2006 for Project A relates back to the date of application, i.e. 04-04-2006. 23 14.4 The second issue on which the Ld.CIT(A) completed the denial of deduction u/s.80IB(10) is that nothing was explained about Project B. As already mentioned earlier completion certificate for Building G & H of Project B has already been granted on 05-10-2005 which is not disputed by the Revenue since a copy of the same was filed before the AO & CIT(A) as certified in the Paper Book and not disputed by the Revenue. So far as the building I + K of Project B is concerned we find although the assessee has applied for the same on 04-04-2006, however, the same is pending before PMC for technical reasons.
14.5 We find the Pune Bench of ITAT in the case of Hindustan Samuha Awas Ltd. has observed as under :
"9. From the above, one this is clear that the date that appear on the Architect's Completion Certificate filed before the local authority is a relevant one. In the instant case, the said date is 25-03-2008 and the assessee filed requisite form before the local authorities intimating the completion of the project. The said certificate/intimation was accepted by the local authority without any amendments or objections. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining the completion certificate on 10-10-2008 is certainly not attributable to the assessee and obtaining the said certificate before 31-03-2008 is beyond the control of the assessee. Assessee's job includes the completion of the building in accordance with the approved plans and intimation of the same to the local authority by way of filing the requisite Forms together with the Completion Certificate given by the Architect, the specialist in the matter and the assessee has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the assessee and the Architect by raising any objections nor accepted by issue of said completion certificate till 10-10-2008. Therefore, the delay in grant of the said certificate is certainly not attributable to the assessee. Therefore, in our opinion, the assessee is not defaulter on this account and thus, the AO has erred in denying the deduction u/s.80IA(10) of the Act. Accordingly, the order of the CIT(A) has to be reversed. Thus, the grounds raised in the appeal are allowed".
14.6 Further, in the instant case as has been pointed out before the AO and CIT(A) as well as before us that the assessee is all along claiming that the project was complete in the year 2006, the purchasers have been given possession of the flats, they have undertaken for the maintenance charges 24 and have started paying electricity charges etc. Further, the PMC has not issued any rejection letter within 21 days from the date of submission of the completion certificate which was submitted on 04-04-2006. The Revenue has not disputed the above facts.
14.7 We find the Hon'ble Gujarat High Court in the case of CIT Vs. Tarnetar Corporation (Supra) has held as under :
"5. We have perused the detailed discussion of the CIT (Appeals) as well as the Tribunal on the issue. In particular, the Tribunal noted that the construction was completed in 2006. Application for BU permission to the Municipal authorities was filed on 15.2.2006 which was rejected on 1.7.06. Several residential units were occupied since the same was done without necessary permission. The assessee had also paid penalty and got such occupation regularized. Several tenements were sold long before the last date.
6. In the present case, therefore, the fact that the assessee had completed the construction well before 31st March, 2008 is not in doubt. It is, of course, true that formally BU permission was not granted by the Municipal Authority by such date. It is equally true that explanation to clause (a) to section 80-IB(10) links the completion of the construction to the BU permission being granted by the local authority. However, not every condition of the statute can be seen as mandatory. If substantial compliance thereof is established on record, in a given case, the court may take the view that minor deviation thereof would not vitiate the very purpose for which deduction was being made available.
7. In the present case, the facts are peculiar. The assessee had not only completed the construction two years before the final date and had applied for BU permission. Such BU permission was not rejected on the ground that construction was not completed, but the some other technical ground. In that view of the matter, granting benefit of deduction cannot be held to be illegal
8. In the result, the Tax Appeal is dismissed."
14.8 From the details furnished by the Ld. Counsel for the assessee we find the assessee has allotted the built up area of 944.10 sq.mtrs against 942 sq. mtrs as per condition of sanction before 27-02-2008. Therefore, we find merit in the submission of the Ld. Counsel for the assessee that the assessee has complied with the condition of allotment on 27-02-2008 which is before 31-03-2008. We find merit in the submission of the Ld. Counsel for the assessee that since the ULC Act was repealed in the year 2009, therefore, PMC/ULC department and 25 Secretariat to Mantralaya are not responding, therefore, the assessee cannot be held responsible.
14.9 We find the Pune Bench of the Tribunal in the case of M/s. Ramsukh Properties Vs. DCIT vide ITA No.84/PN/2011 has held as under :
"6. After going through rival submissions and material on record, we find that the assessee is a firm engaged in business of builder and promoter. The issue before us is regarding allowability of deduction u/s.80IB(10) of the Act on partially complete project. The Assessing Officer has denied the deduction on the ground that project was not complete within the stipulated time. There is no dispute with regard to other conditions laid u/s.80IB(10) of the Act, i.e., commencement of project, area of land of project, etc. Assessee's housing project was approved vide commencement certificate No.3837/04 dated 13.01.2005 out of which completion certificate was obtained and furnished before the Assessing Officer for 173 out of 205 flats. Same was rejected by the Assessing Officer and confirmed by the CIT(A). The request for granting whole deduction in respect of whole project has rightly been rejected because deduction u/s.80IB(10) could not be granted to assessee on incomplete construction at relevant point of time. Regarding proportionate deduction in respect of 173 of 205 flats of project completed as recognized by local authority, i.e., PMC in its completion certificate No.BCO/03/01333 dated 31.03.2008, the Ld. Authorised Representative heavily relied on decision of Bengal Ambuja Housing Development Ltd. (supra), Brigade Enterprises P. Ltd. (supra), AIR Developer (supra), Sheth Developers (supra) and also G.V.Corporation (supra), wherein deduction u/s.80IB(10) was denied as size of some of the residential units exceeded prescribed limit as laid down u/s.80IB(10) of the Act. Above mentioned decisions are applicable in their own sphere, i.e. on point of excess area of some of the flats which hold good in its own sphere. However, in case before us, deduction u/s.80IB(10) of the Act has been rejected on the ground that condition of completion of project before the due date i.e., 31.03.2008 as laid down u/s.80IB(10)(c) of the Act, has not been complied by assessee which is basic condition for allowability of deduction u/s.80IB(10) of the Act. We find that in case of Johar Hassan Zojwalla (supra), wherein condition of completion as laid down in section 80IB(10)(a) could not be complied with because of a stay being granted by MRTP Court. Thus fault of incompletion of construction was not attributable to assessee. In case such a contingency emerges which makes the compliance with provision impossible, then benefit bestowed on an assessee cannot be completely denied. Such liberal interpretation should be used in favour of assessee when he is incapacitated in completing project in time for the reasons beyond his control. In case before us, as stated on behalf of assessee, that assessee submitted certain modifications/rectifications for top floors of building. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee 26 was incapacitated to complete the same in time due to reasons beyond his control. Assessee should not suffer for same. The revision of plan is vested right of assessee which cannot be taken away by strict provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restriction thereon too has to be construed strictly so as to advance the object of provision and not to frustrate the same. The provisions of taxing statute should be construed harmoniously with the object of statue to effectuate the legislative intention. In view of above facts and circumstances, we hold that assessee is entitled for benefit u/s.80IB(10) of the Act in respect of 173 flats completed before prescribed limit. The Assessing Officer is directed accordingly."
14.10 We find the Pune Bench of the Tribunal in the case of Runwal Multihousing Pvt. Ltd. (Supra) has observed as under :
"18. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the assessee obtained the permission for construction of buildings A, B, C, D, E, F and 17 row houses on 12-12-2001. The assessee constructed building Nos. A,C, D and E and the 17 row houses and dropped the idea of construction of Building Nos. B and F being uneconomical and had not submitted any revised plan to PMC. Although the assessee applied for completion certificate on 22-01-2004, the same was not received by the assessee before 31-03-2008. It is the case of the revenue that deduction u/s.80IB(10) cannot be availed of by the assessee since it has not constructed all the six buildings and 17 row houses for which permission was granted and completion certificate was not obtained before 31-03-2008. It is the submission of the learned counsel for the assessee that it has constructed Building Nos. A, C, D and E and 17 row houses and Building Nos. B & F being not feasible was not constructed and the assessee has dropped the idea of construction of the same. It is also the submission of the learned counsel for the assessee that it has applied for completion certificate on 22-01-2004 and since the PMC has a legal problem, which is subjudice, the PMC is not able to grant the completion certificate. It is also the submission of the learned counsel for the assessee that Corporation has started levying municipal taxes, the flat owners have started paying electricity bills and the project on which Building Nos. A, C, D and E and 17 row houses are constructed are on a plot of area of more than 1 acre. Therefore, the assessee is entitled to deduction u/s.80IB(10) on the 4 buildings and 17 row houses which it has completed.
19. We find the Managing Director Shri Pradeep Amrutlal Runwal in his statement recorded during the course of survey u/s.133A has replied to Question Nos. 7, 8, 9, 10 & 12 as under :
"Q.7. Have you received the Completion Certificate from PMC for Runwal Paradise Project ?
Ans. The Completion Certificate for Row Houses 7 to 18 was received. However for other buildings on Runwal Paradise Project we have not received the Completion Certificate as on today though we have applied for the same. Q.8. Whether the construction is completed in respect of all the buildings as per revised plan dated 10-01-2003, Commencement Certificate No.1372?27
Ans. Construction is completed before 31st March 2008 in the entire scheme Runwal Paradise to the extent that we want to build and enjoy the FSI of the project and the area used so is above 1 acre.
Q.9. If the construction is completed before 31st March 2008, why you have not received Completion Certificate from PMC for all buildings in Runwal Paradise Project as on today?
Ans. The Completion Certificate are deemed received since we have applied for the same, but since the matter is subjudice the PMC is not able to grant the Completion Certificate. The very local authority which is responsible for granting the Completion Certificate has a legal problem which is subjudice. Q.10. As stated answering the Question No.9, please state when you have applied for Completion Certificate in respect of Runwal Paradise Project and also submit the relevant applications?
Ans. We have applied for Completion Certificate for the entire project. We are submitting herewith the application for Completion Certificate dated 22-01- 2004vide Commencement Certificate No.1372 dated 10-01-2002 as per Annexure "C". The copies of any further application, if any, we will submit the same on 2nd June 2008.
Q.12. As per revised building layout sanctioned on 10-01-2003, you got approval for construction of buildings A to F and row houses 1 to 18 in Runwal paradise Project. However as seen from the list of Flat Holders submitted by you as Annexure "D" and also the inspection carried out at the site of Runwal Paradise located at S.No.981, at Paud Road, Kothrud, Pune, the construction of buildings B and F is yet to be completed. Please give your comment? Ans. Yes, I agree that the construction of buildings B and F have not been carried out with a perfect understanding in the mind that we wanted to give up these two wings. In case these wings would have been constructed they would have been very shabby and been place for non-hygiene in the entire project. Looking at the merits and demerits these wings were not constructed. Further, building just one floor was economically unviable".
20. So far as the first objection of the revenue that completion certificate from PMC has not been obtained by the assessee before 31-03-2008 we find the assessee through his architect vide application dated 22-01-2004 has applied to PMC for occupancy certificate. (Page 119 of the Paper Book). The submission of the learned counsel for the assessee that the PMC has not yet rejected the said application till date could not be controverted by the Revenue. The further submission of the learned counsel for the assessee that all the flat owners/row house owners have been given possession between 26-10-2002 to 15-01-2007, i.e.prior to 31-03-2008 could not be controverted by the learned DR (Page 55 to 63 of the Paper Book). The learned DR also could not controvert the submission of the learned counsel for the assessee that PMC has started levying municipal taxes and the Electricity Meters are in the name of the flat owners who have started paying electricity bills.
20.1 We find the Pune Bench of the Tribunal in the case of City Development Corporation Vs. ACIT - ITA No. 57 and 1287/PN/2010 order dated 27-09-2012 has held as under :
"12. We have carefully considered the rival submissions. Quite clearly, the dispute is with regard to the completion certificate of building 'E' having been issued by the local authority i.e. Pune Municipal corporation, on 5-5-2008. Sub- clause (i) of clause (a) to section 80-IB(10) requires that the construction of the project in question is to be completed on or before 31-3-2008. Clause (ii) of Explanation below section 80-IB(10)(a) prescribes that the date of completion of construction of housing project shall be taken to be the date on which the 28 completion certificate in respect of such housing project is issued by the local authority. In the present case, it has been issued on 5-5-2008 and hence the case set up by the Revenue that the completion is beyond the mandated date of 31-3- 2008. In this background, we find that there is no dispute that the assessee applied for obtaining the completion certificate in respect of building 'E' on 12-3- 2008. From the discussion made by the Assessing Officer in the assessment order, wherein the factual assertions of the assessee have been reproduced, it is quite evident that the assessee asserted that before 31-3-2008, the construction of building was complete in all respects; that electrical connection was provided to each flat owner; road was complete; water and drainage connection was available; sewerage system was operating; club house was functional; etc. The assessee also pointed out that the local authority had also initiated property tax assessments for each of the flats and the same demonstrated that all the flats in the building were complete. In fact, in para 6.9 of the assessment order, the Assessing Officer noticed that "the facts that the flats were completed and possession given will not come to the rescue of the assessee". The aforesaid finding of the Assessing Officer supports the assertion made by the assessee that factually speaking construction of flats in building 'E' was also complete and possession handed over to the actual user/customers prior to 31-3-2008. Pertinently, on the basis of the architect's certificate confirming completion of construction of building, the assessee applied for the completion certificate to the Pune Municipal Corporation on 12-3-2008. It has been pointed out before us that the local authority i.e. Pune Municipal Corporation did not raise any objection with regard to assessee's application and the certificate for building 'E' was thereafter issued on 5-5-2008. The moot question is as to whether in such a situation can it be said that the assessee's project did not comply with the condition prescribed in sub-clause (i) of clause (a) to section 80-IB(10) of the Act whereby the construction was to be completed on or before 31-3-2008. Somewhat similar situation was considered by our co-ordinate Bench in the case of Hindustan Samutha Awas Ltd. (supra) wherein also on the strength of architect's certificate, an application for obtaining completion certificate was moved to the local authority on 25-2-2008 but in actuality the completion certificate was issued by the local authority on 10-10-2008. The Tribunal noticed that the delay in issuing completion certificate was not attributable to the assessee as no objections were raised by the local authority. The Tribunal after considering its earlier decisions in the case of M/s. Satish Bohra & Associates Vs. ACIT in ITA No. 713 and 714/PN/2010 for A.Y. 2004-05 and 2005-06 dated 7-1-2011; M/s. D.K. Constructions Vs. ITO ITA No. 243/PN/2010 for A.Y. 2006-07; dated 6-12-2010 and Sanghvi and Doshi Enterprises Vs. ITO and others ITA No. 259 to 263/MDS/2010 dated 19-5- 2011 for A.Y. 2005-06 and 2006-07 (TM) has concluded as follows: "From the above, once this is clear that the date that appears on the Architect's Completion certificate filed before the local authority is relevant one. In the instant case, the said date is 25- 3-2008 and the assessee filed requisite form before the local authorities intimating the completion of the project. The said certificate/intimation was accepted by the local authority without any amendments or objections. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining the completion certificate on 10-10-2008 is certainly not attributable to the assessee and obtaining the said certificate before 31-3-2008 is beyond the control of the assessee. Assessee's job includes the completion of the building in accordance with the approved plans and intimation of the same to the local authority by way of filing the requisite forms together with the completion certificate given by the Architect, the specialist in the matter and the assessee has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the assessee and the Architect by raising any objections for accepted by issue of said completion certificate till 10-10-2008. Therefore, the delay in grant of the said certificate is certainly not attributable to the assessee. Therefore, in our opinion, the assessee is not defaulter on this account and thus, the AO has erred in denying the deduction u/s 80-IB(10) of the Act. Accordingly, the order of the CIT(A) has to be reversed. Thus, the grounds raised in the appeal are allowed"29
13. The aforesaid decision of the Tribunal is clearly applicable to the facts of the present case also. In the present case, the completion certificate was applied for before 31-3-2008 i.e. on 12-3-2008. It is undisputable that the application of the assessee has been approved by the local authority without raising any amendment or objection, as has been asserted by the assessee all along and the delayed issuance of the completion certificate by the local authority on 5-5-2008, albeit after the mandated date of 31-3-2008 cannot be attributed to the assessee. In this background of the matter, we therefore, find ample force in the plea of the assessee that denial of deduction u/s 80-IB(10) on such score is uncalled for. In conclusion therefore, in the instant factual background, we hold that the assessee has complied with the condition of completing the construction of the project within the mandated date of 31-3- 2008 even with regard to building 'E', following the parity of the reasoning lid down in the case of Hindustan Samutha Awas Ltd. (supra). .
14. Sub-clause (i) of clause (a) to section 80-IB(10) of the Act requires that the undertaking, developing and building a housing project "completes such construction" or before 31-3-2008. In the present case, assessee has factually asserted right from the stage of assessment proceedings, that the construction of building 'E' was complete in all respects as per sanctioned plan and all the flats were handed over to the actual users/customers prior to 31-3-2008. In the background of the aforesaid factual position which has remained uncontroverted, in our view, on a plain reading of sub-clause (i) of clause (a) to section 80-IB(10) the condition prescribed therein is fulfilled., inasmuch as the construction of building 'E' was complete before 31-3-2008. However, on the reading of clause
(ii) of the Explanation below sec. 80-IB(10)(a) of the Act, it emerges that the completion of construction of a housing project is to be taken to be the date on which completion certificate is issued by the local authority, which in the present case is issued on 5-5-2008 i.e. beyond the stipulated date of 31-3-2008. The moot question is in case the condition of completion construction contained in the substantive section 80-0IB(10)(a)(i) is factually found to be complied with, can the contents of the Explanation clause (ii) thereof, alter the situation? Can an Explanation appended to a section, enlarge the scope of the main section so as to make it more onerous for a tax- payer? Be that as it may, we do not dwell on this aspect any further, as the assessee has been found to be eligible for necessary relief because the condition prescribed in section 80-IB(10)(a)(i) of the Act has been complied with in view of the stated precedents. We therefore, set aside the order of the CIT(A) on this aspect and hold that the assessee cannot be denied the claim of deduction u/s 80-IB(10) on the strength of non-issuance of the completion certificate for building 'E' by the Pune Municipal Corporation before 31-3-2008, having regard to the facts and circumstances of the case." 20.2 We find the Hon'ble Gujarat High court in the case of CIT Vs. Tarnetar Corporation (Supra) has held as under :
"With respect to the second contention, we may record that the contention of the Revenue is that the assessee did not complete the housing project within the statutory time frame. Under sub-clause (i) of clause (a) of section 80IB(10), the assessee since had got approval for the housing projects from the local authority before Ist April 2004 was required to complete the construction latest by 31st March 2008. Relying on explanation (ii) to clause (i), Revenue contends that since BU permission was granted after March 2008, the construction must be deemed to have been completed after such date. Explanation (ii) reads as under :
(ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority.30
CIT (Appeals) as well as the Tribunal after detailed discussion came to the conclusion that such requirement was not mandatory in nature. In the present case, the assessee had completed the construction well before the last date, namely 31st March 2008 and had also sold several units which was completed and actually occupied, and it also applied for BU permission to the local authority. The local authority, however, for technical reasons, at one stage rejected such application in the year 2006 and thereafter upon revised efforts from the assessee granted the same by order dated 19th March 2009.
We have perused the detailed discussion of the CIT(Appeals) as well as the Tribunal on the issue. IN particular, the Tribunal noted that the construction was completed in 2006. Application for BU permission to the Municipal authorities was filed on 15-02-2006 which was rejected on 1-07-06. Several residential units were occupied since the same was done without necessary permission. The assessee had done without necessary permission. The assessee had also paid penalty and got such occupation regularised. Several tenements were sold long before the last date.
In the present case, therefore, the fact that the assessee had completed the construction well before 31st March 2008 is not in doubt. It is, of course, true that formally BU permission was not granted by the Municipal Authority by such date. It is equally true that explanation to clause (a) to section 80IB(10) links the completion of the construction to the BU permission being granted by the local authority. However, not every condition of the statute can be seen as mandatory. If substantial compliance thereof is established on record, in a given case, the court may take the view that minor deviation thereof would not vitiate the very purpose for which deduction was being made available.
In the present case, the facts are peculiar. The assessee had not only completed the construction two years before the final date and had applied for BU permission. Such BU permission was not rejected on the ground that construction was not completed, but the some other technical ground. In that view of the matter, granting benefit of deduction cannot be held to be illegal.
In the result, the Tax Appeal is dismissed".
20.3. We find the Pune Bench of the Tribunal in the case of Hindustan Samuha Awas Ltd. Vs. ITO vide ITA Nos 945 to 950/PN/2010 order dated 30-08-2011 has held as under :
"7. We have considered the above view points of the parties in disputed. We find that it is a fact that the assessee through its architect had filed application with the AMC for issuance of occupancy certificate on 25-3-2008. Requisite fee was also paid by the assessee in this regard. AMC did not raise any objection to the said completion certificate of the Architect. The occupancy certificate dt.10- 10-2008 has been issued by the AMC only on the basis of the said application dt.25-3-2008. It is also an undisputed fact that issuance of occupancy certificate is the prerogative of the local authority i.e. AMC and in this regard, the assessee has no control and it is beyond the power of the assessee to make the AMC issue the said Completion/Occupancy certificate before 31.3.2008. What was under the power and control of the assessee was only to move the AMC for completion certificate fulfilling all the requirements with the AMC for issuance of occupancy certificate, which the assessee has done in the present case. Thus, the delay in 31 issuing the occupancy certificate cannot be attributed on the part of the assessee to deny the claimed deduction u/s 80IB(10) of the act on the basis that the project was not completed by 31-3-2008, especially when there is no objection raised by the AMC regarding deviation in the construction of the project approved by the AMC.
8. We have gone through the orders cited by the assessee's representative and find relevant paragraphs are required to be extracted for completion of the order. They are as follows.
A. Extract from the decision of the Tribunal in the case of M/s. Satish Bora & Associates vide ITA Nos. 713 & 714/pn/2010 "19. .......
1. In the case of PMC, the completion certificate in prescribed form issued by the licensed architect etc. who has supervised the construction is furnished with four sets of completion plan under Rule 7.6 of the DC Rules of the PMC. Thereafter PMC is required to return one of the sets duly certified as Completion Plan to the owner along with the issue of full Occupancy Certificate after inspection of the work under Rule 7.7 of the DC Rules. Since Explation (ii) to Section 80IB(10)(a) of the I.T. Act requires Completion Certificate issued by the local authority to be taken as the date of Completion of the Construction, a general understanding in our view is that a Completion Certificate which is issued by the local authority after conducting inspections of construction by it. In case of PMC, it is only Occupancy Certificate which is issued alongwith certified completion plan after inspection of the construction by it, we have treated the date of issuance of such Occupancy Certificate alongwith Certified Completion plan as the date of Completion Certificate of the construction for the requirement of Explanation (ii) to Section 80IB(10)(a) of the I.T. Act.
2. Since infact PMC do not issue Occupancy Certificate generally in time and with this understanding the Legislature have also introduced a deeming provision of 21 days to put constraint upon PMC, we after detailed deliberation in precedign paragraphs have come to a conclusion that in case of small objections of PMC raised after expiry of deeming period of 21 days under Rule 7.7 of DC Rules under PMC, the date when the applicant acquired deeming sanction will be treated as the date of Completion (occupancy) Certificate to meet out the requirement of Explanation (ii) to Section 80IB (10)(a) of the Act. We have already discussed hereinabove what would be the small objections. In brief those objections which do not affect the main project and are generally temporary constructions.
20. We thus while setting aside orders of the authorities below direct the A.O to allow the claimed deduction u/s. 80IB(10) of the I.T. Act 1961 in the assessment years under consideration treating the required date of completion of construction of the housing project as the date when above discussed deeming provision period of 21 days expired i.e. 20.11.20."
B. Extract from the decision of the Tribunal in the case of Sanghvi & Doshi Enterprise vide ITA NO. 259 TO 263/Mds/2010 32 "24. Next objection of the Assessing Officer is that the project had to be completed on or before 31.03.2008 and since the assessee did not furnish the completion certificate, the assessee is not eligible for deduction. The objection is to the effect that the completion certificate from CMDA is dated 13.6.2008, i.e. three months after the due date for completing the project. In this connection, it has to be noted that the completion certificate is to be issued by the local authority. The question is, whether CMDA can be considered to be a local authority or not. This issue had come up before the Chennai Bench of the Tribunal in the case of Jain Housing & Constructions Ltd. in ITA No.1369/Mds/2009 dated 5.2.2010. In that case, assessee was denied deduction in the absence of completion certificate by the CMDA but completion certificate issued by the Corporation of Chennai was placed on record. The Tribunal in paragraph 3.5 of its order stated that the project layout plan may be required to be approved by the CMDA but as far as the construction of the building is concerned, the local authority, i.e. the Corporation of Chennai is the appropriate authority to regulate the construction as per the building bye-laws and sanction plans. When it is not disputed that the Corporation is the local authority, certificate issued by it cannot be disregarded. The assessee has placed on record the completion certificate issued by the Corporation by way of additional evidence. Since the allowability of the entire deduction depends on all the conditions being fulfilled deduction depends on all the conditions being fulfilled, we admit this additional evidence. The certificate clearly mentions that the building was inspected on 23.11.2007 and that it is found to be satisfied the building permit conditions. We may also mentions that the role of CMDA is quite distinct from that of the Corporation. CMDA looks at the plans from the perspective of the development and urbanisation of the city as a whole. On the other hand, the role of the Corporation while issuing completion certificate is to see that the unit is habitable in all respects like civic amenities and so on. Even for the sake of argument if the CMDA certificate is to be considered, then in that case, the assessee did apply for the completion certificate to CMDA certificate on 13.3.2006. It is a different matter that CMDA raised certain objections and the matter went upto the Hon'ble High Court also. However, the fact remains that the project was completed much before the due date, may be with certain defects. Also, it has to be noted that the CMDA certificate is dated 13.6.2008, i.e. only two months and thirteen days beyond the due date. It is inconceivable that the type of defects which were pointed out by the CMDA could have been rectified in such a short period. Be that as it may, the Hon'ble High Court also ratified the deviations and directed the CMDA to consider the explanation of the assessee. All these facts go to point that the project was indeed completed before the 31.3.2008. Thus, this ground also has no force to deny the assessee the impugned deduction. "
C Extract from the decision of the Tribunal in the case of M/s.
D.K.Construction vide ITA 243/Ind/2010 "7. We have considered the rival contentions, carefully gone through the orders of the authorities below and relevant material placed on record towards which our attention was invited during the course of hearing by the ld. Authorized Representative and the ld. Senior D.R. Provisions of Section 80IB allows claim for deduction in respect of housing project, which has been approved prior to 1.4.2004 and also completed before 33 31.3.2008. During the course of assessment with regard to assessee's claim of deduction u/s 80IB in respect of its D.K.Honey Homes Project, the AO has asked the assessee to furnish the certificate of completion of this project M/s. D.K.Honey Homes. The AO also directly called information from the local authorities by issuing summons u/s.133(6) and a letter was issued by the competent authority dated 11th November, 2008, confirming that no completion certificate has been issued by this office. Accordingly, the assessee's claim for deduction u/s 80-IB was declined. Section 80IB clearly defines the date of completion as "Date of completion of construction of the Housing Project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the Local Authorities", it means Local Authorities is competent to certify the date of completion of Housing Project. The date of issue of such letter by the Local authorities is not so crucial but it should have clearly mentioned the date of completion of project. When the Project is completed on 31.3.2008 and the assessee has informed regarding such completion, the Local Authorities may take its own time for issue of certificate, which may be even after 6-7 months, but the letter so issued by the Local Authorities should clearly mention the date of completion of such project. Merely because such certificate is issued after gap of 8-9 months or even one year, will not adversely affect the assessee if it has mentioned clearly the date of completion of project prior to 31.3.2008. Once the letter for completion of project is given by the assessee to the Local Authority, it is the duty of the Local Authority to verify physically the Projects stated to be completed from its own parameters. This process may take time and, therefore, the date of issue of letter is not so crucial to determine the assessee's eligibility for claim of deduction as per Explanation (ii) of Section 80IB(10)(a) of the Income-tax Act, 1961. What is crucial is date mentioned in the letter so issued certifying completion of the Project. Thus, the date of issue of letter is not important, but the date mentioned in the letter certifying completion of project is important. We, therefore, do not find may merit in the observation of the lower authorities to the effect that the date of completion shall be taken the date on which certificate is physically issued by the Local Authorities."
9. From the above, one this is clear that the date that appear on the Architect's Completion certificate filed before the local authority is a relevant one. In the instant case, the said date is 25-3-2008 and the assessee filed requisite form before the local authorities intimating the completion of the project. The said certificate/ intimation was accepted by the local authority without any amendments or objections. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining the completion certificate on 10-10-2008 is certainly not attributable to the assessee and obtaining the said certificate before 31.3.2008 is beyond the control of the assessee. Assessee's job includes the completion of the building in accordance with the approved plans and intimation of the same to the local authority by way of filing the requisite Forms together with the Completion certificate given by the Architect, the specialist in the matter and the assessee has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the assessee and the Architect by raising any objections nor accepted by issue of said completion certificate till 10.10.2008. Therefore, the delay in grant of the said certificate is certainly not attributable to 34 the assessee. Therefore, in our opinion, the assessee is not defaulter on this account and thus, the AO has erred in denying the deduction u/s 80IA(10) of the Act. Accordingly, the order of the CIT(A) has to be reversed. Thus, the grounds raised in the appeal are allowed.
20.4. In view of the above decisions we are of the considered opinion that since the assessee has done whatever possible on his part, i.e. duly applied to PMC for issue of completion certificate, handed over possession of the flats/row houses to the respective buyers, PMC has started levying municipal taxes and electricity bills paid by respective owners, therefore, deduction u/s.80IB(10) under the facts and circumstances of the case cannot be denied to the assessee for non-receipt of completion certificate from PMC before 31-03-2008 which was beyond the control of the assessee. This view of ours is fortified by our decision in the case of M/s. Ramsukh Properties Vs. DCIT vide ITA No.84/PN/2011 order dated 25- 07-2012 for A.Y. 2007-08 (wherein both of us are parties) wherein it has been held as under:
"6. After going through rival submissions and material on record, we find that the assessee is a firm engaged in business of builder and promoter. The issue before us is regarding allowability of deduction u/s.80IB(10) of the Act on partially complete project. The Assessing Officer has denied the deduction on the ground that project was not complete within the stipulated time. There is no dispute with regard to other conditions laid u/s.80IB(10) of the Act, i.e., commencement of project, area of land of project, etc. Assessee's housing project was approved vide commencement certificate No.3837/04 dated 13.01.2005 out of which completion certificate was obtained and furnished before the Assessing Officer for 173 out of 205 flats. Same was rejected by the Assessing Officer and confirmed by the CIT(A). The request for granting whole deduction in respect of whole project has rightly been rejected because deduction u/s.80IB(10) could not be granted to assessee on incomplete construction at relevant point of time. Regarding proportionate deduction in respect of 173 of 205 flats of project completed as recognized by local authority, i.e., PMC in its completion certificate No.BCO/03/01333 dated 31.03.2008, the Ld. Authorised Representative heavily relied on decision of Bengal Ambuja Housing Development Ltd. (supra), Brigade Enterprises P. Ltd. (supra), AIR Developer (supra), Sheth Developers (supra) and also G.V.Corporation (supra), wherein deduction u/s.80IB(10) was denied as size of some of the residential units exceeded prescribed limit as laid down u/s.80IB(10) of the Act. Above mentioned decisions are applicable in their own sphere, i.e. on point of excess area of some of the flats which hold good in its own sphere.
However, in case before us, deduction u/s.80IB(10) of the Act has been rejected on the ground that condition of completion of project before the due date i.e., 31.03.2008 as laid down u/s.80IB(10)(c) of the Act, has not been complied by assessee which is basic condition for allowability of deduction u/s.80IB(10) of the Act. We find that in case of Johar Hassan Zojwalla (supra), wherein condition of completion as laid down in section 80IB(10)(a) could not be complied with because of a stay being granted by MRTP Court. Thus fault of incompletion of construction was not attributable to assessee. In case such a contingency emerges which makes the compliance with provision impossible, then benefit bestowed on an assessee cannot be completely denied. Such liberal interpretation should be used in favour of assessee when he is incapacitated in completing project in time for the reasons beyond his control. In case before us, as stated on behalf of assessee, that assessee submitted certain modifications/rectifications for top floors of building. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. 35
This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee was incapacitated to complete the same in time due to reasons beyond his control. Assessee should not suffer for same. The revision of plan is vested right of assessee which cannot be taken away by strict provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restriction thereon too has to be construed strictly so as to advance the object of provision and not to frustrate the same. The provisions of taxing statute should be construed harmoniously with the object of statue to effectuate the legislative intention. In view of above facts and circumstances, we hold that assessee is entitled for benefit u/s.80IB(10) of the Act in respect of 173 flats completed before prescribed limit. The Assessing Officer is directed accordingly.
7. As a result, the appeal of the assessee is disposed off as indicated above."
In the light of the above discussion the order of the CIT(A) denying benefit of deduction u/s.80IB(10) for non-receipt of completion certificate is set-aside and the grounds raised by the assessee on this issue are allowed." 14.11 In view of the above decisions the first issue on which the Ld.CIT(A) denied the deduction u/s.80IB(10) i.e., the project is not complete before 31- 03-2008 is not correct since the assessee in the instant case has applied for the completion of the project vide letter dt. 04-04-2006 and the PMC has issued certificate on 31-03-2010 with reference to the application dt. 04-04- 2006, therefore, the completion certificate by PMC relates back to the date of application, i.e. 04-04-2006 and, therefore, in our considered opinion the assessee has completed the project before 31-03-2008. So far as the second issue is concerned the assessee has duly applied for issue of completion of buildings I+K of Project B on 04-04-2006 and has handed over the flats to the customers, that they have undertaken for maintenance charges and have started paying electricity charges. The assessee has done everything 36 possible on its part for issuance of completion certificate. Therefore, the assessee cannot be held responsible for non-issuance of completion certificate by PMC since the delay is not attributable to the assessee.
15. The third issue on which the Ld.CIT(A) upheld the disallowance u/s.80IB(10) is that the assessee had constructed shops admeasuring about 9472 sq.ft. out of the aggregate built up area of 1,16,433 sq.ft. and therefore the commercial area is 8.37% of the aggregate built up area and therefore is in excess of the prescribed limit u/s.80IB(10). We find, there is no dispute to the fact that the project, in the instant case, is approved on 11-01-1999 vide commencement certificate No.2117 for Plot No.3. Similarly, the PMC approved the first building plan in respect of Plot No.4 vide commencement certificate No.4410 dated 06-03-2000. Thus, the housing project has been approved before 31-03-2005. It has been held by the Hon'ble Bombay High Court in the case of CIT Vs. Brahma Associates reported in 333 ITR 289 that the housing project approved before 31-03-2005 can include commercial area. It is the case of the Revenue that the ratio of Brahma Associates will not be applicable for A.Y. 2005-06 and subsequent years since in the case of Brahma Associates the assessment year involved was2003-04 and the position would be different w.e.f. A.Y. 2005-06. 15.1 We find the Hon'ble Gujarat High Court in the case of Manan Corporation after considering the decision of Hon'ble Bombay High Court in the case of Brahma Associates has held as under:
"As mentioned hereinabove criterias to hold this amendment retrospective are absent there is no as explicit and specific wording expressing retrospectivity and even if it is assumed for the sake of arguments that the same is to be read by implication the same does not appear to be reasonable but, in fact emerges to be harsh and unreasonable when y comes to implementation.37
31. Again, as held in case of CIT vs. J.H. Gotia(supra) by the Apex Court such strict construction of the statute if leads to absurd interpretation the same may not subserve the intent and object of legislation.
32. Again, as held in the case of Mysore Minerals Ltd. vs. Commission of Income- Tax reported in 239 ITR 775, Apex Court with two possibilities of interpretation of a taxing statute, one which is favourable to the assessee should be always preferred.
33. As also laid down in the case of Bajaj Tempo Ltd. vs. Commissioner of Income-Tax reported in 196 ITR 188 (SC), taxing statute granting incentives for promoting economic growth and development should be liberally construed to facilitate and advance the objectives of the provision.
34. Above discussion cumulatively when examined with the objectives and intent it sought to achieve in bringing about the said provision of Section 80IB(10), this amended taxing statute requires to be interpreted in favour of the assessee rather than insisting upon strict compliance leading to absurdity.
35. It can be also held that this being a substantive amendment and not a clarificatory amendment, the amendment of this nature cannot have retrospective effect."
15.2 Similar view has been taken by the Mumbai Bench of the Tribunal in the case of Hiranandani Akruti JV Vs. DCIT reported in 39 SOT 498 where it has been held that law as it existed in the A.Y. 2004-05 when the assessee submitted its proposal for slum rehabilitation and the permission for carrying out the development was accorded on 17-11-2003 and when the assessee commenced the development is to be applied and accordingly it was held that the assessee was entitled to deduction u/s.80IB(10) for A.Y. 2006-07 15.3 The Pune Bench of the Tribunal in the case of Opel Shelters Vs. ACIT vide ITA No.219/PN/2009 and D.S. Kulkarni and Associates vide ITA Nio.17/PN/2009 following the decision of the Mumbai Bench of the Tribunal in the case Hiranandani Akruti JV (Supra) has held that in those approved projects where construction has been started much earlier than 01- 04-2005, the assessees are required to complete the plan as it has been approved.
3815.4 In view of the decision of Hon'ble Gujarat High Court in the case of Manan Corporation(Supra) it has to be held that the law as existed in the year when the assessee submitted its proposal and the permission is granted by the local authority and the assessee commences development is to be applied in determining its eligibility of the deduction claimed u/s.80IB(10). The assessee in the instant case cannot be denied the benefit of deduction for construction of commercial area which is more than 2000 sq.ft. or 5% of the built up area of the housing project whichever is less. It has been held by various judicial decisions including the decision of Hon'ble Gujarat High Court in the case of Manan Corporation (Supra) that such amendment to provisions of section 80IB(10) is prospective in nature and not retrospective. We, therefore, hold that the assessee cannot be denied the benefit of deduction u/s.80IB(10) on this issue also.
15.5 So far as the 2 decisions relied on by the Ld. Departmental Representative we find both these decisions are distinguishable and not applicable to the facts of the present case. So far as the decision of the Tribunal in the case of Sainath Estates Pvt. Ltd. (Supra) relied on by the Ld. Departmental Representative is concerned we find the same is not applicable to the facts of the present case. The assessee could not explain the reason for non issuance of completion certificate by the local authority in the case of Sainath Estates Pvt. Ltd. (Supra). However, in the instant case the completion certificate has been issued on 30-03-2010 with respect to the occupancy certificate issued by the architect on 04-04-2006. Further, the delay in issue of completion certificate was not for completing the project but on technical grounds, i.e. non payment of the compounding fees of 39 Rs.2,41,865/- for unauthorized constructions which the assessee has denied all along and non allotment of certain built up area to the economically weaker section of the society which the assessee has complied before 31-03- 2008. So far as the decision in the case of Everest Home Construction (India) Pvt. Ltd. (Supra) to the proposition that the amendment brought in by the Finance Act, 2004 is applicable to A.Y. 2005-06 and onwards, even if the project is approved before 31-03-2005 we find the same is not applicable in view of the decision of Hon'ble Gujarat High Court in the case of Manan Corporation (Supra) which has already been reproduced. Further, the decision of a High Court would prevail upon the decision of the Tribunal which is a lower forum than the High Court.
15.6 Therefore, in view of the above discussions we hold that the assessee in the instant case is entitled to the benefit of deduction u/s.80IB(10) on its housing projects. Accordingly, the first ground of the assessee is allowed. Since the assessee succeeds on the first ground the alternate contention for proportionate deduction become academic in nature and therefore is not required to be adjudicated.
ITA No.179/PN/2011 (A.Y. 2005-06) : ITA No.913/PN/2010 (A.Y. 2007-08) :
16. The grounds by the assessee in the above 2 appeals are identical to the grounds of appeal in ITA No.883/PN/2010. We have already decided the issue and the ground raised by the assessee has been allowed. Following the same reasoning the grounds by the assessee are allowed. 40
17. In the result, all the 3 appeals filed by the assessee are allowed.
Pronounced in the open court on this the 30th day of July 2013 Sd/- Sd/-
(SHAILENDRA KUMAR YADAV) (R.K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Pune Dated: 30th July 2013
Satish
Copy of the order forwarded to :
1. Assessee
2. Department
3. CIT(A)-II, Pune
4 CIT-II, Pune
5. The D.R, "B" Pune Bench
6. Guard File
By order
// True Copy //
Senior Private Secretary
ITAT, Pune Benches, Pune